Ducati is on the market again

povol · Feb 13, 2012

vestindustrial, a private-equity group backed by the Bonomi family, reportedly is looking to sell Italian motorcycle manufacturer Ducati for 1 billion pounds ($1.578 billion U.S.). According to Reuters, Investindustrial’s chairman Andrea Bonomi believes a “world-class industrial partner” is needed to support the growing company and several entities had already expressed interest. Two of the names mentioned at the top of the prospective buyers list are the Indian motorcycle group Mahindra and German auto manufacturer Volkswagen.

Founded in 1926 by the Ducati brothers, Adriano, Bruno and Marcello, the original Ducati shop sold radio components, condensers, and vacuum tubes. In 1946, the company began producing sportbikes. It remained under Ducati family control until 1950, and has since had multiple owners. Its current investors, Investindustrial Holdings, bought the company in 2005.

The Italian marque claimed an impressive 43% in motorcycle sales in North American in 2011 compared to the year prior, with sales of its Diavel and Multistrada leading the way. The territory was also declared Ducati’s number one market in 2011 for the first time ever. Anticipation surrounding the release of its 1199 Panigale superbike is already creating a buzz in 2012.

This is not the first time the Bonomi family has flirted with selling the company. According to the Reuter’s report, Investindustrial entered a Hong Kong public listing for Ducati in 2011 also. It’s known that one of Ducati’s strongest potential suitors, Volkswagen, has a fan in the form of its chairman, Ferdinand Piech, who reportedly rides a Ducati and has expressed regrets for not swooping up the company before when he could have bought it for next to nothing.

Geonerd · Feb 13, 2012

Is this perhaps some old news tidbit that surfaced a month too late? I thought the Paginale was already available.

IMO, VW has enough on its plate trying to fix long-standing quality issues. I hope they stay away.

Maybe a company like Kawasaki? A little Japanese efficiency wouldn't hurt, so long as they don't get carried away and nuke the company from within.

michaelm · Feb 13, 2012

Geonerd said:
Is this perhaps some old news tidbit that surfaced a month too late? I thought the Paginale was already available.

IMO, VW has enough on its plate trying to fix long-standing quality issues. I hope they stay away.

Maybe a company like Kawasaki? A little Japanese efficiency wouldn't hurt, so long as they don't get carried away and nuke the company from within.

Sounds like rossi has helped ducati if they get anything like the money they are asking, which is apparently much more than they paid.

I like ducati being Italian, but I guess they have had non-Italian ownership in the past. VW are obviously a big company with good technical expertise, but not much if any connection with bikes and probably have enough problems with their car production as you say, and the current economic situation in Europe. I don't see kawasaki wanting to have a luxury division at present, or from the racing point of view wanting to fund ducati's gp endeavours, although they might add technical expertise. Perhaps mahindra might be good from the bike racing perspective, being not affected by the european financial problems/recession, presumably being able to fund ducati as a brand leader and able to fund ducati's racing endeavours, and also bringing an "Indian" contender into the premier class to broaden the appeal/market. They have already shown an interest in bike racing with their lower class participation.

mylexicon · Feb 13, 2012

If VW buy it, Ducati might be in decent hands for the first time in company history. Ducati has been kicked down the road for over 60 years, and each successive owner or government czar has imposed his own frivolous plan to dupe someone else into buying it. TPG's IPO was probably the worst idea in company history, though, economic times were so good that it was almost an irresistible strategy.

I can't help but see the latest ownership crew like those who've come and gone before. Lots of good optics. Lots of clever manipulation of the numbers and the product lineup. Quick turnaround. Pump and dump.

povol · Feb 14, 2012

Geonerd said:
Is this perhaps some old news tidbit that surfaced a month too late? I thought the Paginale was already available.

IMO, VW has enough on its plate trying to fix long-standing quality issues. I hope they stay away.

Maybe a company like Kawasaki? A little Japanese efficiency wouldn't hurt, so long as they don't get carried away and nuke the company from within.

Hitting showrooms in late March, early April.

Goatboy · Feb 15, 2012

povol said:
Hitting showrooms in late March, early April.

I read that as "hitting shrooms in March, early April."

[media]http://www.youtube.com/watch?v=tVK5SgEeNkY[/media]

Mental Anarchist · Feb 15, 2012

michaelm said:
Sounds like rossi has helped ducati if they get anything like the money they are asking, which is apparently much more than they paid.

I like ducati being Italian, but I guess they have had non-Italian ownership in the past. VW are obviously a big company with good technical expertise, but not much if any connection with bikes and probably have enough problems with their car production as you say, and the current economic situation in Europe. I don't see kawasaki wanting to have a luxury division at present, or from the racing point of view wanting to fund ducati's gp endeavours, although they might add technical expertise. Perhaps mahindra might be good from the bike racing perspective, being not affected by the european financial problems/recession, presumably being able to fund ducati as a brand leader and able to fund ducati's racing endeavours, and also bringing an "Indian" contender into the premier class to broaden the appeal/market. They have already shown an interest in bike racing with their lower class participation.

If Mahindra bought it then if Rossi ever wins another race perhaps he could do a little Bollywood number as a post race celebration!

povol · Feb 15, 2012

Goatboy said:
I read that as "hitting shrooms in March, early April."

[media]http://www.youtube.com/watch?v=tVK5SgEeNkY[/media]

....., you be trippin

cmk304 · Feb 16, 2012

Ive got it Honda can buy Ducati, just take HRC $4oo Million Budget, then borrow an extra $600 Million.

Problem Solvered.

BarryMachine · Feb 16, 2012

Stoner 27 said:
Ive got it Honda can buy Ducati, just take HRC $4oo Million Budget, then borrow an extra $600 Million.

Problem Solvered.

I don't think Honda are that dumb.

This sale, of Ducati, could well be an attempt to rake in some drastically needed funding.

I don't see it as a good thing at all, I see it as a hint that Ducati are in big trouble financially.

The price, reportedly 3 times what they were acquired for, is no indication at all. Its a ploy to portray a picture of financial well being. If there really is a sale, they are likely to negotiate a more real figure. And we will never hear that real figure.

They are hardly going to ask for half what they paid are they?, even the same value they paid ........

The real telling factor is that they may want to sell.

eltoro · Feb 18, 2012

It would be interesting if the Piaggio Group bought Duc. Seeing Biaggi and Rossi under the same parent company would be funny. But alas, having both Aprilia and Ducati would be redundant.

mylexicon · Feb 18, 2012

BarryMachine said:
I don't think Honda are that dumb.

This sale, of Ducati, could well be an attempt to rake in some drastically needed funding.

I don't see it as a good thing at all, I see it as a hint that Ducati are in big trouble financially.

The price, reportedly 3 times what they were acquired for, is no indication at all. Its a ploy to portray a picture of financial well being. If there really is a sale, they are likely to negotiate a more real figure. And we will never hear that real figure.

They are hardly going to ask for half what they paid are they?, even the same value they paid ........

The real telling factor is that they may want to sell.

Selling the company is not going to put cash in the coffers. If a megacorp like VW buys it, the company will have more liquidity, but not from the sale. IPO is a different story, but they aren't going public.

By most reports the company is in decent condition. The Euro currency crisis is a problem, but more importantly, the history of the company is not a story of profit. The new owners probably don't think they can make the company profitable in the long run. Who can blame them? No one has ever accomplished that feat. Furthermore, during the last restructuring, many debtors became stakeholders so the board is probably loaded with people who are clamoring for a payoff.

Mr Squiggle · Feb 18, 2012

mylexicon said:
Selling the company is not going to put cash in the coffers. If a megacorp like VW buys it, the company will have more liquidity, but not from the sale. IPO is a different story, but they aren't going public.

By most reports the company is in decent condition. The Euro currency crisis is a problem, but more importantly, the history of the company is not a story of profit. The new owners probably don't think they can make the company profitable in the long run. Who can blame them? No one has ever accomplished that feat. Furthermore, during the last restructuring, many debtors became stakeholders so the board is probably loaded with people who are clamoring for a payoff.

Lex....do you think the timing of this sale has anything to do with current Ducati owners bailing out before they possibly have another sub par season in MGP like the last one? If Rossi again fails to get any decent results it cant be good for long term bike sales prospects...so do you think this is a motivating factor for the sale?

mylexicon · Feb 19, 2012

Mr Squiggle said:
Lex....do you think the timing of this sale has anything to do with current Ducati owners bailing out before they possibly have another sub par season in MGP like the last one? If Rossi again fails to get any decent results it cant be good for long term bike sales prospects...so do you think this is a motivating factor for the sale?

Unlikely. The major shareholders are looking at a bigger picture.

North American sales continue to rise, but few people in North America watch motorcycle racing. Ducati realized in the early-mid 2000s that racing success isn't correlated to bike sales. It is the Ducati brand that makes the difference. Racing is an integral part of the Ducati brand, but the company has concluded that selling "race bikes" (1198R, D16RR) to the general public is what brings people into the dealerships.

Most people refuse to believe it, but the company strategic report actually leaked onto the internet after the divorce from TPG. Since then, Ducati have put their name on everything from luggage to snowboards. They've built a cruiser. They've pulled the plug on their official Ducati Corse team in WSBK. Also, as Krop likes to say, Ducati were content to let their world title fall by the wayside as long as Stoner was able to win a few races per season. 100% brand leveraging and brand exposure strategy.

The situation is more hilarious than tragic. In the 750cc homologation special era, the Japanese were vociferous about Ducati's unfair brand equity advantage. It was much easier for Ducati to sell 500 homologation specials, at much higher prices, which afforded Ducati a technological advantage. Only Honda could keep up. Ducati always denied it, and they never used "Ducati" to sell anything but race bikes, including the popular monster which was just a recycled 888 frame (IIRC). Nowadays, brand extension is Ducati's primary corporate strategy.

AFAIK, there is one corporate strategy (a maxim, really) that has survived the restructuring--as goes the SBK, so goes Ducati. If they sell high-margin sportbikes, they enjoy great riches. If they don't sell SBKs (999), or if the price is too modest (1198,848), things are always a bit tight. The 1199 is about to be released, and Ducati probably have a huge pre-sales log. No reason to see if demand softens as the product matures. No reason to find out whether or not the bike will be competitive under the new 2013 WSBK rules. Put it on the market before something goes wrong!

stnd · Feb 19, 2012

Out of the Ducati riders I know maybe 1 knows something about world series racing and he knows that Ducati won something. Most of them bought them because they feel like they bought a Porsche, the feeling of Jet Set in their motorcycle riding life.

"I paid 20k and the guy riding the Honda next to me paid 10k, just look at my brembo brakes and listen to my Termignoni exhaust and open slipper clutch!@!"

And that's all they want for their next bike too.

Nuts · Feb 20, 2012

Gotta admit, if I had spare coin in the bank, and a leave pass to buy a toy, a new 1199 Panagale would be on my list, regardless of how Ross, Hayden or Checa were doing.

Being an Aussie, I support Stoner (although not to the extreme of hating Rossi or anyone else), but I would buy a Ducati ahead of a CBR or R1 every day, even at close to AUD$ 30,000 for the standard one (thats nearly US$ 33,000 thanks to our taxman) or nearly $ 36,000 for the Panagale S.

Frankly, I coudn't care less if it was faster or slower than a CBR or R1, because I am never going to get near its limit, so for me, its all about how it feels. I rode a 1198S about 2 years ago, and it blew me away.

The 1198 and 1199 just look, sound, and feel ....... awesome, and to me thats whats its all about.

Just my opinion, but surely Ducati doesn't stack up though at anywhere near GBP 1.0bn.

stnd · Feb 20, 2012

I would love me a Streetfighter just can't afford it =)

hawkdriver · Feb 20, 2012

Not to mention the bike is going to be so different to anything else in it's category because of the frame, and electronics. This is the first Duc to peak my interest with technology and innovation and not just the looks, this is a good direction for them to take the brand. It's similar to what lambo has done to really keep things exotic, it isn't just about looks, the bike has the business under the skin now to match the price point.

Nuts said:
Gotta admit, if I had spare coin in the bank, and a leave pass to buy a toy, a new 1199 Panagale would be on my list, regardless of how Ross, Hayden or Checa were doing.

Being an Aussie, I support Stoner (although not to the extreme of hating Rossi or anyone else), but I would buy a Ducati ahead of a CBR or R1 every day, even at close to AUD$ 30,000 for the standard one (thats nearly US$ 33,000 thanks to our taxman) or nearly $ 36,000 for the Panagale S.

Frankly, I coudn't care less if it was faster or slower than a CBR or R1, because I am never going to get near its limit, so for me, its all about how it feels. I rode a 1198S about 2 years ago, and it blew me away.

The 1198 and 1199 just look, sound, and feel ....... awesome, and to me thats whats its all about.

Just my opinion, but surely Ducati doesn't stack up though at anywhere near GBP 1.0bn.

bluegreen · Feb 20, 2012

Nuts said:
Gotta admit, if I had spare coin in the bank, and a leave pass to buy a toy, a new 1199 Panagale would be on my list, regardless of how Ross, Hayden or Checa were doing.

Being an Aussie, I support Stoner (although not to the extreme of hating Rossi or anyone else), but I would buy a Ducati ahead of a CBR or R1 every day, even at close to AUD$ 30,000 for the standard one (thats nearly US$ 33,000 thanks to our taxman) or nearly $ 36,000 for the Panagale S.

Frankly, I coudn't care less if it was faster or slower than a CBR or R1, because I am never going to get near its limit, so for me, its all about how it feels. I rode a 1198S about 2 years ago, and it blew me away.

The 1198 and 1199 just look, sound, and feel ....... awesome, and to me thats whats its all about.

Just my opinion, but surely Ducati doesn't stack up though at anywhere near GBP 1.0bn.

Preach on !!

Mr Squiggle · Feb 20, 2012

mylexicon said:
Unlikely. The major shareholders are looking at a bigger picture.

North American sales continue to rise, but few people in North America watch motorcycle racing. Ducati realized in the early-mid 2000s that racing success isn't correlated to bike sales. It is the Ducati brand that makes the difference. Racing is an integral part of the Ducati brand, but the company has concluded that selling "race bikes" (1198R, D16RR) to the general public is what brings people into the dealerships.

Most people refuse to believe it, but the company strategic report actually leaked onto the internet after the divorce from TPG. Since then, Ducati have put their name on everything from luggage to snowboards. They've built a cruiser. They've pulled the plug on their official Ducati Corse team in WSBK. Also, as Krop likes to say, Ducati were content to let their world title fall by the wayside as long as Stoner was able to win a few races per season. 100% brand leveraging and brand exposure strategy.

The situation is more hilarious than tragic. In the 750cc homologation special era, the Japanese were vociferous about Ducati's unfair brand equity advantage. It was much easier for Ducati to sell 500 homologation specials, at much higher prices, which afforded Ducati a technological advantage. Only Honda could keep up. Ducati always denied it, and they never used "Ducati" to sell anything but race bikes, including the popular monster which was just a recycled 888 frame (IIRC). Nowadays, brand extension is Ducati's primary corporate strategy.

AFAIK, there is one corporate strategy (a maxim, really) that has survived the restructuring--as goes the SBK, so goes Ducati. If they sell high-margin sportbikes, they enjoy great riches. If they don't sell SBKs (999), or if the price is too modest (1198,848), things are always a bit tight. The 1199 is about to be released, and Ducati probably have a huge pre-sales log. No reason to see if demand softens as the product matures. No reason to find out whether or not the bike will be competitive under the new 2013 WSBK rules. Put it on the market before something goes wrong!

Cheers Lex

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Ducati is on the market again

povol

Geonerd

michaelm

mylexicon

povol

Goatboy

Mental Anarchist

povol

cmk304

BarryMachine

eltoro

mylexicon

Mr Squiggle

mylexicon

stnd

Nuts

stnd

hawkdriver

bluegreen

Mr Squiggle

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